The ECJ has handed down its judgment in the case of Pia Messner v Firma Stefan Kruger, a reference from the German Court. The case concerns the interpretation of Article 6 of the Distance Selling Directive (97/7/EC), specifically whether a seller should be compensated for the use which a consumer has made of goods when the consumer withdraws from the contract and returns the goods within the specified withdrawal period. Advocate General Krstenjak gave her opinion in this case earlier this year which was reported in the March edition of this Bulletin.
Article 6(1) of Directive 97/7/EC (Directive) provides:
"For any distance contract the consumer shall have a period of at least 7 working days in which to withdraw from the contract without penalty and without giving any reason. The only charge that may be made to the consumer because of the exercise of his right of withdrawal is the direct cost of returning the goods. The period for exercise of this right shall begin from the day of receipt of the goods by the consumer where the obligations laid down in Article 5 have been fulfilled. If the supplier has failed to fulfil the obligations laid down in Article 5, the period shall be 3 months from the day of their receipt by the consumer."
Article 6(2) of the Directive provides:
"Where the right of withdrawal has been exercised by the customer pursuant to this Article, the supplier shall be obliged to reimburse the sums paid by the consumer free of charge. The only charge that may be made to the consumer because of the exercise of his right of withdrawal is the direct cost of returning the goods. Such reimbursement must be carried out as soon as possible and in any case within 30 days."
Article 5 contains provisions concerning the information which suppliers must provide to consumers, in particular their right to withdraw from the contract.
The Directive was implemented into UK law by the Consumer Protection (Distance Selling) Regulations 2000.
The defendant ran an internet based mail order business. In December 2005, the claimant purchased a used laptop from the defendant for €278. The defendant's terms and conditions stated that customers could return the goods within 14 days of receipt for a full refund. They also said:
"Your attention is expressly drawn to the fact that you are liable to pay compensation for the deterioration in goods ordered from us as a result of use for the purpose for which they were intended."
In August 2006, the laptop developed a fault which the defendant refused to repair. In November 2006, the claimant returned the goods to the defendant seeking a full refund. The defendant argued that it was entitled to compensation from the claimant for her use of the laptop for 8 months. The defendant calculated this compensation to be €316.80. The claimant issued proceedings for the return of the purchase price.
The German Court made a finding of fact that the claimant had never received proper notice of her right to withdraw from the contract. German law implementing the Directive states that there is no long-stop date on the right to withdraw where the consumer is not given proper notice of the right to do so. Therefore the issue in this case was not whether the claimant could return the laptop after such a long period had elapsed since purchase (the court was clear that she could) but whether the defendant could claim compensation for her use of it during that period. The German Civil Code included a provision entitling sellers to charge consumers for the use made of goods prior to their return to the seller. The question for the ECJ was whether this provision was compatible with Article 6(1) and 6(2) of the Directive.
The Advocate General's opinion was that this provision was not compatible with Article 6(1) and 6(2) of the Directive. Compensation was a form of charge and Article 6 made it clear that the only charge that could be made to the consumer exercising the right of withdrawal was the direct cost of returning the goods. The Advocate General felt that this accorded with the spirit of the Directive which was to promote distance selling. An obligation on consumers to compensate sellers would have a deterrent effect.
The ECJ agreed with the Advocate General. It held that the Directive aimed to give consumers the chance to inspect goods that they had not seen and charging them for using goods they returned under the Directive would deter them from making use of their rights under it. However, the ECJ said that if the consumer's use offended principles such as good faith or caused unjust enrichment, a supplier might be able to charge the consumer.
This opinion should be of limited concern to suppliers under distance contracts subject to the UK Regulations as it will not change the position for them. The UK Regulations do not contain a provision like that in the German Civil Code. The ECJ's decision is, however, useful in confirming that UK distance sellers cannot require consumers to pay for the use they have made of goods prior to returning them within the relevant withdrawal period.